Dart Corporation’s leverage ratio increased from 2.5 in 2017 to 3.0 in 2018. Without lookingat the financial statements, which statement best describes what may have occurred?a. The company incurred new equity financing in 2018, but it may or may not have beenmore profitable.b. The company incurred new debt financing in 2018, making it more profitable.c. The company incurred new debt financing in 2018, but it may or may not have beenmore profitable.d. The company incurred new equity financing in 2018, making it less profitable.
Dart Corporation’s leverage ratio increased from 2.5 in 2017 to 3.0 in 2018. Without lookingat the financial statements, which statement best describes what may have occurred?a. The company incurred new equity financing in 2018, but it may or may not have beenmore profitable.b. The company incurred new debt financing in 2018, making it more profitable.c. The company incurred new debt financing in 2018, but it may or may not have beenmore profitable.d. The company incurred new equity financing in 2018, making it less profitable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Dart Corporation’s leverage ratio increased from 2.5 in 2017 to 3.0 in 2018. Without looking
at the financial statements, which statement best describes what may have occurred?
a. The company incurred new equity financing in 2018, but it may or may not have been
more profitable.
b. The company incurred new debt financing in 2018, making it more profitable.
c. The company incurred new debt financing in 2018, but it may or may not have been
more profitable.
d. The company incurred new equity financing in 2018, making it less profitable.
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